Mortgage Terms

Mortgage Terms Dictionary

Labor Lien Legal Term is a legal document filed and recorded against a piece of property. This lien is normally filed by a subcontractor that has provided labor for a project but has not been paid.

Contract Legal Term is a legally binding agreement (oral or written) between two or more persons regarding an exchange of some sort. A legally binding contract must include consideration passing between the parties, an intention on the part of all parties to be bound to the contract, a meeting of the minds of the parties as to the contents of the contract, and an element of clarity such that the terms of the contract may be interpreted, understood and enforced by a court

Title Insurance Legal Term policies typically insure a home buyer against any title-search errors or mistakes, and against loss due to disputes over property ownership. Title Insurance can additionally offer protection to the lender under similar circumstances. The cost of title insurance is usually a set value per thousand of dollars of the total loan amount.

General Contractor Legal Term is a person or company that enters into a contract with the owner of a project for the construction and who takes full responsibility for its completion, although the contractor may enter into subcontracts with others for the performance of specific parts or phases of the project

Covenants Legal Term is a written agreement between two or more parties in which a party or parties pledge to perform or not perform specified acts with regard to property; usually found in such real estate documents as deeds, mortgages, leases and contracts for deed.

Easement Legal TermThe right of the owner of one parcel of land to use all or part of the land of another for a specific purpose. Runs with the land. Requires one property to be in dominant position (enjoys the benefit of the easement) and one property to be in servient position (is subject to the right).

Cost Plus Legal Term is a term referring to how the contractor will be compensated for his work. In a cost plus contract the contractor is paid for the material and labor costs plus a flat fee or a percentage of the total cost.

Legal

Bankruptcy Legal TermThe state of being unable to pay your debts such that you submit yourself to the protection of the state. A person or business may voluntarily assign himself into bankruptcy or may be petitioned into bankruptcy by his creditors. Once in bankruptcy, the person surrenders his assets to a trustee in bankruptcy who sells the assets for the benefit of the bankrupt's creditors, first secured creditors then unsecured creditors. Once a person is discharged from bankruptcy, none of his former creditors may pursue him for his former debts.

Closing Statement Legal TermA document which sets out the financial agreement between the parties, the costs each must pay, and all other similar information regarding a transaction (may be joint or separate for each party).

Easement Legal TermThe right of the owner of one parcel of land to use all or part of the land of another for a specific purpose. Runs with the land. Requires one property to be in dominant position (enjoys the benefit of the easement) and one property to be in servient position (is subject to the right).

Encroachment Legal TermThe intrusion across the property line and into one property of an improvement to a neighboring property. May result in a claim for adverse possession if the encroachment is unchallenged for a long period of time.

Free and Clear Legal TermA description of title to property which is unencumbered and subject to no competing claims.

First Lien Legal TermThe registered legal claim which stands first in line to enjoy the proceeds of a sale of the property. Liens generally are ordered according to time or registration but various statutes allow some liens to jump to the head of the line.

Legal Description Legal TermA description of a piece of real estate that is drafted according to legal requirements and which clearly and adequately establishes the identity of the property so described. Found in most instruments for registration on title to land.

Escrow Legal TermEscrow is usually money held in trust by a third party to be turned over to the grantee only upon fulfillment of a condition. This could be proceeds from a loan closing that would be held in escrow until a particular condition is met.

Encroachment Legal TermThe intrusion across the property line and into one property of an improvement to a neighboring property. May result in a claim for adverse possession if the encroachment is unchallenged for a long period of time.

Closing Statement Legal TermA document which sets out the financial agreement between the parties, the costs each must pay, and all other similar information regarding a transaction (may be joint or separate for each party).

Bankruptcy Legal TermThe state of being unable to pay your debts such that you submit yourself to the protection of the state. A person or business may voluntarily assign himself into bankruptcy or may be petitioned into bankruptcy by his creditors. Once in bankruptcy, the person surrenders his assets to a trustee in bankruptcy who sells the assets for the benefit of the bankrupt's creditors, first secured creditors then unsecured creditors. Once a person is discharged from bankruptcy, none of his former creditors may pursue him for his former debts.

Free and Clear Legal TermA description of title to property which is unencumbered and subject to no competing claims.

First Lien Legal TermThe registered legal claim which stands first in line to enjoy the proceeds of a sale of the property. Liens generally are ordered according to time or registration but various statutes allow some liens to jump to the head of the line.

Hazard Insurance Legal TermA type of insurance designed to cover damage caused by a peril specified in the policy of insurance (i.e. fire, flood, etc.).

Legal Description Legal TermA description of a piece of real estate that is drafted according to legal requirements and which clearly and adequately establishes the identity of the property so described. Found in most instruments for registration on title to land.